Bookkeeping Tips for New Franchisees

When you buy a franchise, you become responsible for managing the financial records of your business. You also need to comply with brand requirements and legal regulations. It can be a lot for one person to manage.

One of your requirements may be having an outside bookkeeper who manages the financial recordkeeping. Whether it’s required or not, having a trusted bookkeeping partner can save you time, money, and future headaches. Some bookkeeping companies even specialize in working with franchises — BookWerks^TM is one them. With so much experience in the franchise world, we are the go-to outsourced bookkeeping company for many franchise owners.

If you’re just getting started with your franchise, here are some things to keep in mind.

11 Bookkeeping Tips for New Franchisees

1. Open a Separate Account for your Franchise

You don’t want to mix personal and business finances. Open a dedicated business bank account for all transactions pertaining to your franchise.

2. Use Accounting Software

Your franchisor may have a recommendation, or, if they use an outside bookkeeping service like BookWerks^TM, may require you to use a cloud-based system such as Xero or QuickBooks. When everyone in the brand uses the same system, it helps the franchisor maintain consistency, create accessible reports and easily compare performance between franchises.

3. Follow Your Brand’s Guidelines

Most franchisors provide bookkeeping and financial reporting guidelines and procedures that franchisees need to follow. Staying in compliance with your franchise agreement keeps your business relationship strong and productive.

If you are new to running a business, be sure to ask questions if there is anything you don’t understand. Or call us — here at BookWerks^TM, we are always happy to help new franchisees.

We can help you understand your Profit and Loss Statement, Balance Sheet and Case Flow Statement so that you can make informed business decisions and confidently discuss finances with your franchisor.

4. Track Your Royalties and Fees Carefully

Tracking royalties and fees is often a part of your franchise agreement. To stay on the good side of your brand, be meticulous in your tracking. Attend to royalties religiously to make sure your numbers are accurate and you don’t get behind. Your franchisor may give you a template or specific instructions for reporting these expenses.

Because it’s so important to track royalties and fees accurately, many franchisees find peace of mind when the find a franchise bookkeeping partner. Our virtual bookkeeping service works with many franchises, helping franchisors and franchisees work together for precise financial recordkeeping. When we are hired by a brand, we become part of your team to streamline bookkeeping.

5. Budget

From the start, set a budget and stick to it. A regularly generated and revised financial forecast can be critical to financial planning and decision-making. Whether you generate financial reports yourself or work with a franchise bookkeeping service to managed reporting requirements, using these reports to generate a consistent financial forecast is key to making sure you stay on budget and on track.

6. Keep Accurate Sales Records

Record all sales, including daily or weekly sales reports. Some franchises use Point-of-Sale (POS) systems that automate this process.

7. Track all Expenses

Whether you use an automated or manual system, keep detailed records of all business expenses, including

• Rent
• Utilities
• Payroll
• Supplies
• Marketing

and all other costs associated with running your business. As a client of our bookkeeping company, your expenses are automatically recorded in the cloud and are available to you at all times.

8. Implement an Inventory Management System

Your franchisor can help with this. If you regularly reconcile your inventory levels, the data used in your financial reports will be more accurate. This gives you access to better data that you can use to make important decisions for your business.

9. Reconcile Your Financial Accounts at Least Monthly

Review your bank and credit card statements regularly to make sure there are no errors or discrepancies.

10. Collect and Remit Sales Tax if Required

When you become a business owner, taxes become a little more complicated. It’s important that you get the details right, especially when you’re just starting out. Get familiar with all tax regulations and deadlines that apply to your business at the local, state and federal levels. This will help you understand if and when you need to collect and remit sales tax.

11. Get Help as Needed

If any training or workshops are offered by your franchisor related to bookkeeping and financial management, take advantage of these opportunities! You will be better able to stay up on the franchisor’s expectations for a successful partnership.

Why Partner with a Franchise Bookkeeping Service?

If your franchisor’s requirements are complex, and they do not have an existing relationship with a bookkeeper you can use, consider outsourcing your bookkeeping.

Be sure the company you choose has franchise bookkeeping experience.

When you know your business’s financial health at all times, you have the power to make important changes when needed that can make a difference. Accurate and timely bookkeeping will help you meet your obligations to the brand and make informed decisions to help you grow within the franchise system.